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5 College Savings Resolutions for 2017

By U.S. News & World Report

As director of college planning for the Massachusetts Educational Financing Authority, Julie Shields-Rutyna’s job is to help families plan, save and pay for college. But with two kids — one in high school and the other in college — she also has her own family to worry about.

“The truth is, it’s a struggle for me, just like it is for everybody else, to fit college savings in,” she says. “You really can’t save too much. I still have that resolution to continue saving and to step it up a little bit.”

It’s easy to say “I’ll do it next year” when it comes to saving for college, especially because it may not seem as pressing as other financial obligations.

[Explore ways to vary college savings strategies.]

But consider resolving to give some attention to college savings this year. College costs continue to rise at a pace that exceeds inflation, according to the College Board, and average student loan debt at graduation is growing steadily. Seven in 10 seniors who graduated in 2015 had student loan debt that exceeded $30,000 per borrower, according to the Project on Student Loan Debt.

Whether you’re just starting out or have a child nearing college, here are five college savings resolutions for 2017 .

Resolution 1. Start saving: If you’ve been putting off saving for college, start by opening a college savings account or designating an account you already have for that purpose.

“However you save is great, as long as you put it into an account that you designate as college savings account, so when the roof starts leaking you don’t go to that fund,” says Shields-Rutyna.

Kevin Miller, a certified financial planner professional at Wyomissing, Pennsylvania-based Berkshire Investment Group, LPL Financial, recommends using a 529 plan, a state-sponsored college savings plan that allows money to grow on a tax-deferred basis and to be taken out tax free if used for qualified education expenses. There are typically no or low minimums — ranging from $15 to $250 — to open an account.

“It’s not an arm and a leg to get started,” says Miller.

Although nearly every state has a plan, experts say it often makes sense to look at your own state’s plan first, particularly if you could get a tax credit or deduction for using an in-state plan. But if you’re not sure where to start, check out college savings plan comparison websites, such as savingforcollege.com.

[Learn college savings pros and cons for financial newbies.]

Resolution 2. Set up automatic withdrawals: Even if it’s a small amount, $25 or $50 a month, set up monthly contributions to come straight out of your bank account and into a college savings account. Some employers even offer automatic payroll deductions into 529 plans.

Shields-Rutyna says data about college savings in Massachusetts shows that people who are enrolled in automatic withdrawals save more. As it becomes habit, most people soon find they don’t miss it, she says.

“You start early; you set it up; and you just get used to it,” says Miller. “And it really can add up with paycheck to paycheck contributions.”

Resolution 3. Increase contributions: If you already contribute monthly to your college savings plan, see if you can increase the amount you regularly put in. Shields-Rutyna says she tries to bump up her monthly savings contributions each spring.

Sometimes seeing the growth of regular contributions motivates people to want to contribute more, Miller says, adding that “it’s almost like a challenge.”

“Once you get started and start contributing on a systematic basis and see the benefits, I think that’s where people can really get excited and see the importance of saving for the long term and for college,” Miller says.

Resolution 4. Put cash gifts into college savings: Whether it’s money for a birthday or Christmas, Miller says he recommends parents put monetary gifts from friends and family into a college savings account.

You could even consider asking for college contributions rather than a physical gift.

“I think maybe that’s a hard conversation for some people to have with family members or friends,” Shields-Rutyna says. “The truth is, people love to know what would be a good gift to give on an occasion. Most grandparents, aunts or uncles would probably be thrilled knowing.”

[Discover four ways to kick off the college savings talk.]

Resolution 5. Get your child involved: Include your kids in the saving s conversation. Miller says when he was growing up, his parents would match, dollar-for-dollar, what he put in the bank. That same approach could be applied to college savings.

Another strategy, Shields-Rutyna says, is to decide with your children to put a percentage of money they earn baby -sitting or mowing lawns into a college savings fund.

“The whole family needs to relax and say, ‘ OK, we’re going to do the best we can, and let’s all do it together.'”

Trying to save for college? Get tips and more in the U.S. News College Savings 101 center.

More from U.S. News

3 Common Questions From Grandparents About Saving for College

4 Ways to Give the Gift of College Savings

Do’s, Don’ts for Late-Start College Savers

5 College Savings Resolutions for 2017 originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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